About the indicator

When a country does not withhold tax on dividend payments made by resident subsidiaries of multinational corporations to affiliates outside the country within the same group, it reduces the government’s tax revenue collection associated with income generated within a country’s borders. It also creates an incentive for profit shifting, which may cause other countries to lower their tax rates in response in a race to the bottom. This indicator assesses the country’s lowest withholding tax on outbound dividends and compares it with the highest available unilateral withholding tax rate on dividends worldwide.